Tesco logs £40-million net loss on accounting scandal

LONDON: Supermarket giant Tesco revealed on Wednesday that it fell into an annual net loss of £40 million due to a costly accounting scandal at Britain’s biggest retailer. The after-tax loss, equivalent to $50 million or 47 million euros, was skewed by a £235-million hit in costs arising from the threeyear-old scandal.

The company’s performance contrasted with a net profit of £138 million in the previous financial year, Tesco added in a statement. However, operating or underlying profits before one-off items rallied almost a third to £1.28 billion in its 2016/2017 financial year, which ran until the end of February. That beat market expectations.

And annual sales grew for the first time in seven years by 3.7% to £55.9 billion, despite fierce domestic competition.

The news comes two weeks after Tesco agreed to a fine and compensation costs in Serious Fraud Office deal, under which the firm will not face prosecution.

Charges have previously been brought against three former Tesco executives, who will face trial over alleged fraud and false accounting. Tesco also said on Wednesday that it expected its vast £3.7-billion takeover of British wholesaling giant Booker to be submitted for shareholder approval by either late 2017 or early 2018.

“We are confident that we can build on this strong performance in the year ahead,” said chief executive Dave Lewis in the statement.